LOS ANGELES (AP) â¿¿ The spring home-selling season is off to a lackluster start, and a turnaround may not be in the cards until the second half of the year.
That's the main takeaway from Lennar Corp.'s latest quarterly results, which offered a glimpse into home sales trends in February, the official start of the traditional peak home-selling season.
Homebuilders hope to see improved sales this spring after a dismal 2010 that marked the fifth consecutive year that new home sales declined. But Lennar's results suggest the prospects for a strong seasonal lift in home sales may be slim.The Miami-based builder said Tuesday that new home orders fell 12 percent in the December to February quarter and home deliveries dropped 3 percent. The company surprised Wall Street by reporting a profit for the quarter, but the earnings came about as the builder cut homebuilding costs and other expenses. It also booked millions in revenue buying troubled loans and properties from banks. Lennar's bottom line also got a boost from a $37.5 million lawsuit settlement and other special items. Despite the profitable turn, the builder's homebuilding business continues to grapple with weak homebuyer demand. "The long-awaited selling season of 2011 has not yet defined itself as the beginning of a recovery cycle," Lennar President and CEO Stuart Miller said. It's still unclear whether home sales this spring will gain momentum or remain sluggish, Miller said. He noted that turnout by would-be homebuyers has been promising at times, raising hopes of a coming sales rally, but that traffic ultimately has not translated into robust sales. "It has been more of the nature of a head fake and has lacked any substance that might define a clear upward trend," Miller said. Homebuilders are a bellwether for the housing market and the economy. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, by some estimates.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV